The Competition Commission of Pakistan (CCP) has approved the acquisition of shareholding in Masood Textile Mills Limited by UAE-based Velora Global Ventures F.Z.C. from two Chinese companies following a Phase I competition assessment under the Competition Act, 2010.
The transaction involves the acquisition of shares from Shanghai Challenge Textile Company Limited and Zhejiang Xinao Industry Company Limited under a Share Purchase Agreement.
Velora Global Ventures, registered with the Ajman Free Zone Authority in the United Arab Emirates, is engaged in wholesale trading of textiles and clothing and commercial brokerage activities outside Pakistan. Its associated companies, Gulf Textile Sourcing F.Z.C. and Zara Textile Trading F.Z.C., are involved in international textile sourcing and trading, customer development and order coordination.
Masood Textile Mills, a publicly listed Pakistani company, manufactures and sells cotton and synthetic fiber yarn, knitted and dyed fabrics, and garments.
During its Phase I assessment, the CCP examined whether the transaction could substantially lessen competition or create or strengthen a dominant position. The commission found that Velora Global Ventures had no pre merger market presence in Pakistan.
As a result, the acquisition is not expected to materially change Masood Textile Mills’ output, domestic sales or market position. The CCP also examined the potential vertical relationship between Velora’s international textile trading activities and Masood Textile Mills’ manufacturing operations and found no competition concerns.
The commission further determined that the transaction would not create entry barriers or significantly increase the acquirer’s market power. It therefore authorized the acquisition under Section 31(1)(d)(i) of the Competition Act, 2010.
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